Sapient
(NASDAQ: SAPE) today reported the following financial results for the
first quarter ended March 31, 2012:

Service revenues were $260.6 million compared to $241.3 million in the
first quarter of 2011, an increase of $19.3 million or 8%.
Sequentially, service revenues were slightly down from the fourth
quarter of 2011. On a constant currency basis, revenues increased 8%
over the first quarter of 2011 and were down slightly sequentially.

GAAP income from operations was $16.1 million, or 6.2% of service
revenues, compared to $18.5 million, or 7.7% of service revenues,
reported in the first quarter of 2011.

Non-GAAP income from operations was $24.9 million, or 9.6% of service
revenues, compared to $25.8 million,or 10.7% of service
revenues, reported in the first quarter of 2011.

GAAP diluted net income per share was $0.07, compared to $0.09 in the
first quarter of 2011.

Non-GAAP diluted net income per share was $0.11, compared to $0.12 in
the first quarter of 2011.

“While 2012 started modestly slower than we would have liked, we are
seeing momentum across all areas of the business,” said Sapient
President and Chief Executive Officer Alan J. Herrick. “We were pleased
to see Sapient Global Markets stabilize in the quarter and have the
opportunity to grow as we progress through the year. SapientNitro
continues to post industry-leading growth rates and we’re confident
about its unique position in the marketplace.”

The company used cash from operations of $13.5 million in the first
quarter of 2012, compared to a use of $19.0 million in the first quarter
of 2011. As of March 31, 2012, the company had cash, cash equivalents
and marketable securities of $208.7 million. Days sales outstanding was
69 days for the first quarter of 2012, up from 63 days in the fourth
quarter of 2011 and down from 73 days for the first quarter of 2011.

Outlook

Sapient management provided the following guidance:

For the quarter ending June 30, 2012, service revenues are expected to
be in the range of $267 million to $277 million.

Second quarter 2012 non-GAAP operating margin is expected to be 10% to
11.5%.

Webcast and Conference Call

Sapient will host a discussion of its first quarter results at 4:30 p.m.
ET today, which will be broadcast live on the Internet. The dial-in
information for the conference call is:

US: (877) 291-1296International: (720) 259-9209

To access the live webcast of the event, please click on the link below:

In addition, a re-broadcast of the webcast will be available in the
investors section of www.sapient.com.

Adjusted (Non-GAAP) Financial Measures

Sapient provides non-GAAP financial measures to complement reported GAAP
results. Management believes these measures help illustrate underlying
trends in the company's business and uses the measures to establish
budgets and operational goals, communicated internally and externally,
for managing the company’s business and evaluating its performance. The
company anticipates that it will continue to report both GAAP and
certain non-GAAP financial measures in its financial results, including
non-GAAP results that exclude stock-based compensation expense,
restructuring and other related charges, amortization of purchased
intangible assets, acquisition costs and other related charges, and
income tax benefits or provisions resulting from changes in the
valuation allowance. In addition, the company may present service
revenues in constant currency terms, which excludes the effect of
currency fluctuations between the U.S. dollar and the functional
currency of the entity in which the revenue was transacted. The effect
is excluded by translating the current period's local currency service
revenues into U.S. dollars using the average local currency exchange
rates that were in effect during the prior period of comparison. Because
the company’s reported non-GAAP financial measures are not calculated
according to GAAP, these measures are not comparable to GAAP and may not
necessarily be comparable to similarly described non-GAAP measures
reported by other companies within the company’s industry. Consequently,
Sapient’s non-GAAP financial measures should not be evaluated in
isolation or supplant comparable GAAP measures, but, rather, should be
considered together with its consolidated financial statements, which
are prepared according to GAAP.

Safe Harbor Statement

This press release contains forward-looking statements – in particular,
the financial guidance for the second quarter of 2012, including
expected service revenues and expected non-GAAP operating margin – that
involve a number of risks and uncertainties. All forward looking
statements are based upon current expectations and beliefs and various
assumptions. Actual results could differ materially from management’s
expectations and the forward-looking statements contained in this
release. A number of factors could cause actual events to differ
materially from those indicated, including, without limitation: the
continued acceptance of the company’s services; a reduction in the
demand for the company’s services in light of the current economic
environment; the company’s ability to accurately set fees for and
complete its current and future client projects on a timely basis,
successfully manage risks associated with its international operations,
manage its growth and projects effectively, successfully integrate and
achieve anticipated benefits from acquisitions, and continue to attract
and retain high-quality employees; and other risks and uncertainties as
set forth in the company’s filings with the SEC, including without
limitation the most recent Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. Any forward-looking statement speaks only as of
the date on which it is made, and the company undertakes no obligation
to update any forward-looking statements for any reason, including to
reflect events or circumstances after the date on which such statements
are made or to reflect the occurrence of anticipated or unanticipated
events or circumstances, except as required by law.

About Sapient

Sapient is a global services company that helps clients transform in the
areas of business, marketing, and technology. The company operates three
divisions that enable clients to gain a competitive advantage and
succeed in an increasingly digital world. SapientNitro, Sapient Global
Markets and Sapient Government Services fuse insight, creativity and
technology to drive innovation and to help clients navigate complex
business problems. Our approach is the subject of case studies used by
MBA programs at Harvard and Yale. The company has operations in North
America, Europe, and Asia-Pacific. For more information, visit www.sapient.com.

Sapient is a registered service mark of Sapient Corporation.

Sapient Corporation

Consolidated Unaudited Condensed Statements of Operations

Three Months Ended March 31,

2012

2011

(in thousands, except per share amounts)

Revenues:

Service revenues

$

260,622

$

241,340

Reimbursable expenses

8,783

8,554

Total gross revenues

269,405

249,894

Operating expenses:

Project personnel expenses

183,371

166,676

Reimbursable expenses

8,783

8,554

Total project personnel expenses and reimbursable expenses

192,154

175,230

Selling and marketing expenses

10,695

10,156

General and administrative expenses

46,772

39,105

Restructuring and other related (benefits) charges

(76

)

5,642

Amortization of purchased intangible assets

2,622

1,273

Acquisition costs and other related charges

1,125

-

Total operating expenses

253,292

231,406

Income from operations

16,113

18,488

Interest and other income, net

1,822

1,459

Income before income taxes

17,935

19,947

Provision for income taxes

8,453

7,789

Net income

$

9,482

$

12,158

Basic net income per share

$

0.07

$

0.09

Diluted net income per share

$

0.07

$

0.09

Weighted average common shares

139,458

136,293

Weighted average dilutive common share equivalents

4,458

4,272

Weighted average common shares and dilutive common share

equivalents

143,916

140,565

Sapient Corporation

Consolidated Unaudited Condensed Balance Sheets

March 31, 2012

December 31, 2011

(in thousands)

ASSETS

Current assets:

Cash and cash equivalents

$

196,961

$

212,406

Marketable securities, current portion

6,297

7,748

Restricted cash, current portion

372

426

Accounts receivable, less allowance for doubtful accounts

137,626

156,109

Unbilled revenues

89,280

61,712

Deferred tax assets, current portion

20,209

19,966

Prepaid expenses and other current assets

21,538

22,734

Total current assets

472,283

481,101

Restricted cash, net of current portion

3,775

3,779

Marketable securities, net of current portion

1,290

1,290

Property and equipment, net

72,644

64,257

Purchased intangible assets, net

35,141

36,822

Goodwill

109,786

107,971

Deferred tax assets, net of current portion

9,375

9,227

Other assets

8,528

8,591

Total assets

$

712,822

$

713,038

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

22,739

$

25,389

Accrued restructuring costs, current portion

150

324

Accrued compensation

56,896

77,721

Deferred revenues

21,023

25,599

Other current liabilities

49,246

61,680

Total current liabilities

150,054

190,713

Accrued restructuring costs, net of current portion

374

407

Other long-term liabilities

59,305

42,514

Total liabilities

209,733

233,634

Stockholders' equity

503,089

479,404

Total liabilities and stockholders’ equity

$

712,822

$

713,038

Sapient Corporation

Consolidated Unaudited Statements of Cash Flows

Three Months Ended

March 31,

2012

2011

(in thousands)

Cash flows from operating activities:

Net income

$

9,482

$

12,158

Adjustments to reconcile net income to net cash used in operating
activities:

Loss recognized on disposition of fixed assets

47

1

Unrealized loss on financial instruments

107

120

Depreciation and amortization expense

8,086

5,480

Deferred income taxes

15

1,984

Non-cash restructuring charges

-

4,612

Stock-based compensation expense

5,148

3,876

Changes in operating assets and liabilities, net of impact of
acquisitions:

Accounts receivable

19,911

(1,512

)

Unbilled revenues

(27,152

)

(29,784

)

Prepaid expenses and other current assets

1,400

(2,933

)

Other assets

419

(604

)

Accounts payable

(4,205

)

1,463

Accrued compensation

(23,177

)

(18,101

)

Accrued restructuring costs

(208

)

(854

)

Deferred revenues

(4,731

)

(2,051

)

Other current liabilities

(909

)

5,573

Other long-term liabilities

2,245

1,598

Net cash used in operating activities

(13,522

)

(18,974

)

Cash flows from investing activities:

Purchases of property and equipment and cost of internally developed
software

(10,450

)

(8,065

)

Sales and maturities of marketable securities classified as
available-for-sale

1,900

2,197

Purchases of marketable securities classified as available-for-sale

(86

)

(2,298

)

Cash received (paid) on financial instruments, net

56

(37

)

Change in restricted cash

112

926

Net cash used in investing activities

(8,468

)

(7,277

)

Cash flows from financing activities:

Principal payments under capital lease obligations

(20

)

(21

)

Proceeds from credit facilities

-

1,768

Repayment of amounts borrowed under credit facilities

-

(4,862

)

Proceeds from stock option and purchase plans

457

4,236

Net cash provided by financing activities

437

1,121

Effect of exchange rate changes on cash and cash equivalents

6,108

2,068

Decrease in cash and cash equivalents

(15,445

)

(23,062

)

Cash and cash equivalents, at beginning of period

212,406

219,448

Cash and cash equivalents, at end of period

$

196,961

$

196,386

Sapient Corporation

Unaudited Reconciliation of Non-GAAP Financial Measures

Three Months Ended March 31,

2012

2011

(in thousands, except per share amounts)

Service revenues

$

260,622

$

241,340

GAAP income from operations

$

16,113

$

18,488

Stock-based compensation expense

5,148

3,876

Restructuring and other related (benefits) charges

(76

)

5,642

Amortization of purchased intangible assets

2,622

1,273

Acquisition costs and other related charges

1,125

-

Stock-based compensation review and restatement benefit

-

(3,500

)

Non-GAAP income from operations

$

24,932

$

25,779

GAAP operating margin

6.2

%

7.7

%

Effect of adjustments detailed above

3.4

%

3.0

%

Non-GAAP operating margin

9.6

%

10.7

%

GAAP net income

$

9,482

$

12,158

Stock-based compensation expense, net of tax

3,243

2,451

Restructuring and other related (benefits) charges, net of tax

(54

)

3,496

Amortization of purchased intangible assets, net of tax

2,091

1,025

Acquisition costs and other related charges, net of tax

796

-

Stock-based compensation review and restatement benefit, net of tax

-

(2,085

)

Non-GAAP net income

$

15,558

$

17,045

GAAP basic income per share

$

0.07

$

0.09

Effect of adjustments detailed above

0.04

0.04

Non-GAAP basic income per share

$

0.11

$

0.13

GAAP and Non-GAAP weighted average common shares

139,458

136,293

GAAP diluted income per share

$

0.07

$

0.09

Effect of adjustments noted above and change in dilution noted below

0.04

0.03

Non-GAAP diluted income per share

$

0.11

$

0.12

GAAP and Non-GAAP weighted average common shares and dilutive
common share equivalents